Raytheon posts higher profit, forecasts strong bookings
US weapons maker Raytheon Co reported higher first-quarter profit on Thursday after a tax credit and favourable pension adjustments and forecast strong bookings and a slight gain in margins for the rest of the year. Net income attributable to shareholders rose to $596 million, or $1.89 per share, from $488 million, or $1.49 a share, a year earlier. The company, which makes missiles and other military equipment, left its full-year forecast unchanged.
Copyright Reuters, 2014
Excluding the tax credit and pension items, which were previously announced, earnings dropped to $1.43 per share from $1.56. Raytheon Chief Financial Officer David Wajsgras said the company expected strong bookings and a slight gain in operating margins for the rest of this year after posting the highest quarterly earnings per share and cash flow in over a decade.
Cash flow reached $659 million in the first quarter, up from $422 million a year earlier. Wajsgras told Reuters that the company's international demand remained strong, and that foreign orders would account for nearly 30 percent of revenues and nearly 40 percent of bookings in 2014.
Revenues fell 6.3 percent to $5.5 billion in the first quarter, a reflection of US budget cuts, but Raytheon programs fared well in the 2015 US budget proposal, Wajsgras said. Sales and operating income were down at three of its four business divisions, but its intelligence, information and services unit showed a 1 percent increase in operating income despite a 5 percent drop in sales.
The company still expected revenue to reach $22.5 billion to $23 billion for the full year, with earnings of $6.74 to $6.89 per share, or $5.76 to $5.91, excluding special items. Wajsgras said first-quarter bookings rose to $4.3 billion from $3.6 billion a year earlier due to a large missile defence order from Kuwait and a big cybersecurity order from an undisclosed country. Bookings were expected to top $7 billion in the second quarter, he said. The company expected a slight improvement in operating margin over the course of the year, after the measure reached 14.3 percent in the first quarter, he said.